Yahoo today announced that it has entered into a definitive agreement to acquire Right Media, the creator of the Right Media online advertising exchange.

The acquisition, which follows Google's recent $3.1bn purchase of DoubleClick, is described by Yahoo as "a key step" in its long-term online advertising strategy.

Yahoo bought a 20 per cent stake in Right Media in October 2006, and will acquire the remaining equity interest for approximately $680m.

Shareholders will be paid in approximately equal parts cash and stock, and Right Media options and similar equity awards will be assumed by Yahoo.

The move will help "democratise" the buying and selling of digitally-enabled advertising, according to Yahoo chairman and chief executive Terry Semel.

"This acquisition is an important step in our long-term vision to build the industry's leading advertising and publisher ecosystem," he said.

Yahoo will increase its participation in the Right Media Exchange both as a buyer and seller.